Anti Piracy
& Anti Counterfeit Blog

Developers can end the $20 billion pirate app industry

Posted by David Casellas on Monday, Aug 7, 2017

The pirate app industry is a $20 billion problem, putting users at risk of malware and siphoning revenue from developers and brands. Here’s how to end it:

developers-can-end-the-20-billion-pirate-app-industry.png

We previously wrote on how fake shopping apps put consumers at risk of exposure to malware and data theft, but the problem of pirated apps has begun to spiral out of control. On the Play Store and App Store there have been many examples of apps being pirated, especially where there are release gaps between stores and countries. However, the real problem exists over thousands of third-party pirate app stores, which attract consumers with free pirate editions of trending apps.

<<Free Ebook: How to select a brand protection solution>>

The stores are mostly visited by mobile users in China, but this is not always the case. Third-party application store Aptoide, for example, which claims to be the most popular third-party app store, has a smart design and full support for over 30 languages. It offers over 700,000 apps... all of which are free. This includes popular Minecraft: Pocket Edition, which retails for $6.99 on The App Store and Play Store. It’s a simple download on jailbroken iPhones and Android phones that allow installation of third-party apps.

Any app that’s popular is a target, and it’s nearly impossible to completely protect an app against hacking: a 2014 study on mobile security by Arxan found that of the top paid-for apps, 97% of Android apps and 87% of iOS apps had been pirated.

And the losses are in the billions: the third-party app industry will earn $20 billion this year: a number of significance when compared to a forecasted $40 billion for the App Store and $21 billion for Google Play. With 59% of app developers failing to break even, pirate apps pose a very real threat to innovation and app development.

Pirated apps can and are frequently found to be harmful, distributing malware like CopyCat, which last month infected over 14 million devices, but even those innocuous eliminate an important point of communication between consumer and company, and surrender trademarks - and thus, brand equity - into the hands of pirates. Worse, pirate apps can siphon developers’ revenue through in-app purchases and advertising. Third-party app stores can threaten revenue to an even greater extent: illicit app store Aptoide, for example, offers partners the opportunity to create more app stores with shared revenue models, which will of course further spread the problem of the pirate app industry.

Unfortunately, shutting down entire third-party app stores is almost impossible. It’s a point of pride for Android that users have increased autonomy in the ability to install from third-parties, and just as Google can list illegal links app stores can offer infringing content as long as they comply with DMCA removal requests.

So what can brands and developers do to protect their IP? From a prevention point of view, savvy developers can modify code so that when it is duplicated they will be alerted, or monetise illicit apps through implementing their own adverts. Apps should also always be hardened, to prevent against reverse-engineering. Marketing and educating consumers as to the potential dangers of third-party applications may also have some effect. Reacting to already-pirated apps may prove more difficult, as once an app has been installed it cannot be remotely deleted by a genuine brand. There have been attempts to cut off advertisements on piracy apps, although these have so far fallen short. What will likely prove most effective as a reactionary measure is to play pirates at their own game.

Anyone who’s entered the world of DMCA takedowns will tell you the same thing: it’s a hydra effect, a game of virtual whack-a-mole. As soon as an infringement is taken down (which may take up to a few weeks), a duplicate of the same content is hosted elsewhere, with all parties legally able to claim no awareness of the infringement prior to the takedown requests. However, a tech-driven brand protection solution can monitor app stores 24/7, automating removal requests as soon as infringing content is uploaded. A good brand protection service will also have relationships with these hosts, ensuring that removal requests received from the service will be prioritised, or in some cases automatic. In order to protect consumers, revenue and brand equity, app developers have more reason than ever to establish a brand protection strategy, and fighting fire with fire seems like an effective method.

For more information on selecting a brand protection solution, download our free eBook:

New Call-to-action

About the author

David Casellas

Post Written by David Casellas

David Casellas is the Co-founder of Red Points and is head of international strategy and future planning. David is an expert in digital piracy and intellectual property protection. He has over 7 years of experience working with global brands and international bodies.